The International Trade Commision: Stopping Infringers at the Border

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1. What Is the U.S. International Trade Commission?

The U.S. International Trade Commission (USITC) is an independent federal agency with broad investigative responsibilities on matters of trade. Among its duties, the ITC administers Section 337 investigations under the Tariff Act of 1930, as amended (19 U.S.C. § 1337). These investigations address unfair import practices, including the importation of goods that infringe U.S. intellectual property rights—patents, trademarks, and copyrights.

Key Powers

  1. Exclusion Orders: The ITC can direct U.S. Customs and Border Protection (CBP) to deny entry to infringing products.
  2. Cease and Desist Orders: The ITC can prohibit entities from further importing, distributing, or selling infringing goods that are already in the country.
  3. No Monetary Damages: Unlike typical federal court litigation, the ITC does not award financial damages for infringement. Instead, its remedies focus on stopping infringing imports.

2. Stopping Infringing Goods at the Border

2.1 Role of CBP in Enforcement

Once the ITC issues an exclusion order, U.S. Customs and Border Protection (CBP) enforces it at ports of entry. If CBP encounters products that fall within the scope of the ITC’s order, they will be seized or excluded from entering the United States.

2.2 Types of Exclusion Orders

  1. Limited Exclusion Order (LEO)
    • Applies to specific named respondents found to violate IP rights. Only products from those respondents are excluded.
  2. General Exclusion Order (GEO)
    • Broader in scope—applies to all infringing products, regardless of who imports them. A GEO is issued if the ITC finds that it’s necessary to prevent circumvention or if there’s a widespread pattern of infringement.

3. The Mechanism: Filing a Section 337 Complaint

3.1 Section 337 of the Tariff Act

Trademark, copyright, and patent owners can invoke Section 337 to stop infringing goods from entering the U.S. The key requirements for a viable Section 337 complaint typically include:

  • An allegation that imported goods infringe a valid U.S. IP right (e.g., patent, trademark, or copyright).
  • Proof of a domestic industry—i.e., a showing that the complainant has substantial U.S. operations (manufacturing, research and development, licensing, etc.) related to the IP in question.
  • Evidence of the unfair act, such as direct infringement or induced infringement by importers.

3.2 Complaint Filing

To initiate an ITC investigation, the rights holder must file a formal complaint with the ITC, outlining:

  • Nature of the IP right (patent number, trademark registration, copyright registration, etc.).
  • Identity of the alleged infringers (the proposed respondents).
  • Description of the infringing goods and how they infringe (technical comparisons for patents, mark comparisons for trademarks, etc.).
  • Proof of domestic industry: Demonstrating significant investment or employment in the United States related to the exploitation of the IP.

ITC Complaint Filing Instructionshttps://www.usitc.gov/intellectual_property/filing_guidance.htm

3.3 Initiation of Investigation

After reviewing the complaint, the ITC Commission decides whether to institute an investigation. If instituted, an Administrative Law Judge (ALJ) presides over the case. The investigation proceeds similarly to a trial, with discovery, hearings, and legal briefs.

3.4 Administrative Law Judge’s Determination

At the conclusion of the evidentiary hearing, the ALJ issues an Initial Determination on whether a violation of Section 337 has occurred. This determination includes findings of fact and law.

3.5 Final Determination and Remedy

The ITC reviews the ALJ’s Initial Determination. If the Commission finds a violation, it typically issues an exclusion order and/or a cease and desist order.

  • Exclusion Order: Directs CBP to exclude infringing goods at the border.
  • Cease and Desist Order: Prevents respondents from engaging in specified conduct (e.g., marketing or sales of infringing products already in the U.S.).

4. Scope of ITC Enforcement: Patents, Trademarks, and Copyrights

While patent-based Section 337 actions are the most common, the ITC’s jurisdiction equally covers:

  1. Patent Infringement
    • A large volume of Section 337 investigations involve claims of patent infringement on imported products.
  2. Trademark Infringement
    • If a product bears a counterfeit or confusingly similar mark, Section 337 can be used to exclude it.
  3. Copyright Infringement
    • Section 337 can address imported copies of protected works (e.g., software, books, media) that are unlicensed or illicitly reproduced.

5.1 Federal Court Litigation

  • Monetary Damages: Available in federal court, but not before the ITC.
  • Jurisdictional Reach: A federal court must have personal jurisdiction over foreign infringers, which can be challenging. The ITC’s in rem authority over goods at the border can be more efficient in stopping imports.
  • Injunctions: Federal courts rarely (very rarely) issue injunctions to stop patent infringement after the Ebay case. The ITC functions in many ways like an injunction, and can be used in conjunction with the federal court litigation to stop infringement.

5.2 U.S. Customs and Border Protection Recordation

  • Rights holders can record registered trademarks and copyrights with CBP (Trademark Recordation with CBP).
  • This allows CBP to monitor and detain suspected counterfeit or pirated goods. However, a Section 337 exclusion order through the ITC often provides a stronger, more enforceable basis for keeping infringing products out of the U.S.

6. Practical Considerations

  1. Speed and Effectiveness
    • Section 337 investigations often move faster than federal court litigation, due to statutory timelines.
    • If successful, an exclusion order is a powerful remedy—goods can be blocked at the border.
  2. Cost
    • ITC litigation can be expensive, involving complex technical or legal proofs. However, the strong injunctive relief (exclusion) can be particularly valuable in global markets.
  3. Domestic Industry Requirement
    • Patent and trademark owners must show they have a substantial domestic presence (e.g., manufacturing, R&D, licensing) in the U.S. The standard can vary based on the type of IP and the industry.
  4. Enforcement Against Multiple Respondents
    • Section 337 is well-suited to tackle multiple foreign respondents in a single action, streamlining efforts for rights holders facing widespread parallel infringement.

7. Conclusion

The U.S. International Trade Commission plays a crucial role in protecting U.S. intellectual property rights by stopping infringing goods at the border. Through Section 337 investigations, the ITC can issue exclusion orders that direct CBP to block entry of infringing imports, thereby preventing unfair competition in the U.S. market. Although the ITC does not award monetary damages, its ability to swiftly exclude infringing items makes it a vital forum for IP owners—particularly those facing foreign or hard-to-locate infringers.

For more detailed guidance on whether a Section 337 complaint is the right approach for your situation, consult with an intellectual property attorney experienced in ITC practice and international trade law.

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